New Zealand dollar dips near $0.59 as risk mood stays cautious
The New Zealand dollar slipped to around $0.59, hovering near a two-week low as cautious sentiment outweighed hopes for a near-term home rate hike. Higher global bond yields and Middle East tensions added pressure.
The New Zealand dollar slipped to around $0.59 on Tuesday, hovering at a two-week low, as cautious investor sentiment overshadowed expectations of a rate hike at home.
Global bond yields rose to multi-decade highs as concerns over higher inflation fueled expectations of a Federal Reserve interest-rate increase later this month, curbing appetite for riskier assets.
Meanwhile, renewed tensions in the Middle East also pressured currencies of economies exposed to higher energy costs.
Limiting the kiwi’s losses, the Reserve Bank of New Zealand is widely expected to raise the official cash rate by 25 basis points to 2.75% on Wednesday.
Markets also expect the OCR to reach around 3% by December and 3.5% next year, particularly after the central bank signaled that monetary policy needs to become less accommodative.